4
Levy on Manufacture - Central Excise duty is leviable on the activity of manufacture of goods carried on in India – Section 3. Basic Exemption limit –Rs. 1.5 Crores Only for certain listed products Only goods are liable to levy of Central Excise Immovable property is outside the purview of Central Excise. 4

5
Test to check whether immovable or movable is Whether the structure could be move to other place without any damage being made or dismantled? Yes- it is movable No- Immovable Municipal Corporation of Greater Mumbai Vs. IOC, AIR 1991 SC 686

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If the resultant of the process results in emergence of immovable property – no Manufacture Mere fixing of machinery to fixed structure would not make immovable property Apex Court in the case of CCEx., Ahmd. v. Solid & Correct Engineering Works Ltd., 2010 (252) E.L.T. 481 (S.C.) held that attachment of plant with nuts and bolts intended to provide stability and prevent vibration cannot be termed as attached to earth and the said items cannot be termed immovable property.

7
CCE v. Kone Elevators India Ltd., 2001 (138) E.L.T. 635 (Tri.) Tribunal held that lift coming into existence only after it is installed along with the building and becomes functional it is an immovable property and not goods. Similar view in OTIS Elevator Co. (India) Ltd. v. SCE, 2003 (151) E.L.T. 499 (HC).

8
Any activity which results in immovable property cannot be subjected to excise. Supreme Court in Sirpur Paper Mills Ltd. v. CCE, 1998 (97) E.L.T. 3 (S.C.), held that assembly of a paper making machine and its erection at site mainly from bought out components and by fabricating the rest of the parts at site, amounts to manufacture. Triveni Engineering & Industries Ltd. v. CCE, 2000 (120) E.L.T. 273, held that while the fixing of the steam turbine, alternator and coupling them to form a turbo alternator amounts to a manufacturing process, the resultant property being immovable the same cannot be brought to excise.

9
In Craft Interiors Pvt. Ltd. v. CCE, 2006 (203) E.L.T. 529 (S.C.), it was held that Storage units, running counters, overhead unit, rear and side unit, wall unit, kitchen unit and other items ordinarily immovable or not removable without cannibalizing cannot be termed as furniture in common parlance and therefore it is not excisable. The Supreme Court brought out the difference between furniture which is excisable and fixtures which are not. Hence, it was held that items like desks and chairs are furniture and therefore excisable.

12
All activities covered under the definition of service would be liable to service tax. Exceptions are contained in Negative List Definition of service specifically includes Declared Service which is defined in Section 66E.

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CONSTRUCTION ( b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration is received after issuance of completion certificate by the competent authority. WORKS CONTRACT (h) service portion in the execution of a works contract V.Raghuraman

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(I) the expression "competent authority" means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely: (A) Registered Architect; or (B) Registered Chartered engineer; or (C) licensed surveyor of respective local body of the city or town or village or development or planning authority; (II) the expression "construction" includes additions, alterations, replacements or remodelling of any existing civil structure; V.Raghuraman

15
(54) "works contract" means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such property

16
Contract in which goods involved in execution of such contract is liable to VAT / Sales tax And Such contract is for the purpose of : construction Erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such property V.Raghuraman

17
What are the activities covered construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly When it is taxable If consideration is received prior to issue of completion certificate by the competent authority Construction" includes additions, alterations, replacements or remodeling of any existing civil structure

19
ProviderAny person RecipientGovernment or a local authority or governmental authority Governmental authority means a board, or an authority or any other body established with 90% or more participation by way of equity or control by Government and set up by an Act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W of the Constitution Nature of Services Construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of Specified structures of buildings:

20
(a) a civil structure or original works predominantly for a non- industrial or non-commercial use; (b) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity etc.; (c) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; (d) canal, dam or other irrigation works; Notification. No. 25/2012- Sl. No. 12 V.Raghuraman

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(e) pipeline, conduit or plant for (i) drinking water supply (ii) water treatment (iii)sewerage treatment or disposal; or (f) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 65 B of the said Finance Act ; Meaning residential complex means any complex comprising of a building or buildings, having more than one single residential unit, single residential unit means an independent residential unit with specific facilities for living, cooking and sanitary requirements,

22
ProviderAny person RecipientAny person Nature of Services construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of: (a) a road, bridge, tunnel, or terminal for road transportation for use by general public (b) a civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana; V.Raghuraman

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(c) a building owned by an entity registered under section 12 AA of the Income tax Act, 1961(43 of 1961) and meant predominantly for religious use by general public (d) (d)a pollution control or effluent treatment plant, except located as a part of a factory; or (e) a structure meant for funeral, burial or cremation of deceased V.Raghuraman

24
ProviderAny person RecipientAny person Nature of Services construction, erection, commissioning, or installation of original works pertaining to (a) an airport, port or railways, including monorail or metro (b) a single residential unit otherwise than as a part of a residential complex; (c) low- cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the Scheme of Affordable Housing in Partnership framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India V.Raghuraman

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(d) post- harvest storage infrastructure for agricultural produce including a cold storages for such purposes (e) Mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages Original Work: (i) all new constructions; (ii) all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable; (iii) erection, commissioning or installation of plant, machinery or equipment or structures, whether pre-fabricated or otherwise V.Raghuraman

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Villa Projects & Development & sale of site – not liable to service tax Sub-Contractor : Sl.No. 29 (h) Services of sub- contractor providing services by way of works contract to another contractor providing works contract services which are exempt

27
Joint Development Agreements – Whether construction of land owners share is liable to service tax? Whether developmental rights itself can be termed as immovable property? Bombay High Court in Chheda Housing Development... vs Bibijan Shaikh Farid And Ors. 2007 (3) MhLj 402 wherein High Court examined the question as to whether F.S.I / TDR could be termed as a benefit arising from the land.

30
Gross amount includes Labour charges for execution of the works; Amount paid to a sub-contractor for labour and services Charges for planning, designing and architects fees charges for obtaining on hire or otherwise, machinery and tools used for the execution of the works contract cost of consumables such as water, electricity, fuel, used in the execution of the works contract cost of establishment of the contractor relatable to supply of labour and services other similar expenses relatable to supply of labour and services; and profit earned by the service provider relatable to supply of labour and ser

31
If VAT is not paid on actual value then Nature of worksValuation Original works40% of the total amount charged Maintenance, repair, reconditioning etc of goods 75% of the total amount charged Other works including maintenance, repair, completion and finishing services such as glazing, plastering, floor and wall tiling, installation of electrical fittings of an immovable property 60% of the total amount charged Condition: No Credit of inputs shall be availed

32
Original Works: (i) all new constructions; (ii) all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable; (iii) erection, commissioning or installation of plant, machinery or equipment or structures, whether pre-fabricated or otherwise

33
Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer. Percentage of Abatement- 75% Conditions: No Cenvat shall be availed on inputs Value of land is included in the amount charged from the service receiver Budget 2013 Notification No.2/2013 provides for 70% abatement where the carpet area of residential unit is more than 2000 square feet or the amount charged is more than Rs. One Crore

37
Rule 3 Earliest of following events would be the point of taxation Date of invoice Date of completion of service (if invoice is not issued within 30 days of completion of service) Date of receipt of advance (to the extent of advance)

38
Meaning: services are to be provided on continuous basis or recurrent basis under a contract for a period exceeding 3 months period with obligation for payment on periodical basis or from time to time OR Notified by Government Service Notified by Government Telecommunication services Service portion in works contract

39
Notified by Government as Continuous Supply of service If contract / agreement provides for payment on periodical basis then Each event or period shall be point of taxation Else, follow Rule 3

40
Whether developer who outsources the work completely is said to be a works contractor? K Raheja Development corporation (141 STC 298 (SC) – The decision is doubted by Supreme Court in Larsen & Toubro Ltd v. State of Karnataka 2008 (12) S.T.R. 257 (S.C.) wherein it was held if the ratio of Raheja Development case is to be accepted then there would be no difference between works contract and a contract for sale of chattel as a chattel.